From the Desk of Irwin Michael – January 29, 2016 In our January 2016 ABC Perspective, we highlighted the many far reaching economic, financial, and lifestyle changes that have transformed the investing environment over the past decade. Specifically, we pointed out: The development and rapid growth of ecommerce The emergence of cloud computing The shifting discretionary and media consumption habits of consumers One of our favoured ABC Fund’s holdings, Facebook Inc., has been a great beneficiary of these important macro trends. We are particularly attracted to its strong growth in advertising revenue from its Facebook and Instagram platforms, which have both rapidly increased their user bases over the past five years. Having reported its latest quarterly results two days ago, Facebook disclosed that it had an average of 1.04 billion daily active users, an increase of 17% from 2014. Additionally, the company reported a 25% increase in its mobile daily active users to 934 million in the same period. Facebook’s expansive consumer reach and its ability to target specific demographics enabled the company to report surprisingly exceptional Q4 2015 results. Facebook’s revenue and EPS for 2015 amounted to $17.93 billion and $2.28 per share respectively, beating consensus estimates of $17.45 billion and $2.17 per share. Impressively, on a year-over-year basis, revenue increased 44% and EPS rose by 29% from 2014. Overall, it is our view that Facebook’s outperformance is a reflection of its powerful business model, strong brand, and its ability to satisfy user demands and to opportunistically adapt to the evolving consumer environment. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.